April 30, 2015
by Jim Malewitz
Never shy in their efforts to reel in out-of-state employers, Texas’ leadership often declares the state “wide open for business” — touting a hands-off regulatory policy that beckons companies to make their homes here.
But when arguing for a series of bills this session that would change the way Texas gives out environmental permits, Republican lawmakers describe a state bureaucracy far more onerous than that of its neighbors.
“We’re losing a lot of jobs to surrounding states,” Sen. Troy Fraser, R-Horseshoe Bay, said this month, minutes before the Senate easily passed Senate Bill 709, an effort to speed up the permitting process at the Texas Commission on Environmental Quality, which he says discourages companies from building large-scale projects in Texas. “This is clearly for economic development.”
The bill would scale back contested-case hearings, a process that allows the public to scrutinize and challenge industrial applications for environmental permits, such as those allowing wastewater discharges or air pollution emissions.
Several industry groups have applauded the legislation, whose companion – House Bill 1865 – House lawmakers may take up Thursday. But environmental and consumer advocates are deeply worried that the proposed changes would stifle what little voice everyday Texans have when manufacturers, chemical plants, landfills and other high-polluting businesses set up shop in their communities. And they suggest that industry is exaggerating the burdens.
“It’s like these contested-case hearings become the last resort already,” said Christy Muse, executive director of the Hill Country Alliance, an environmental advocate for the scenic Central Texas region. “It’s just like a tiny little thing we have.”
The process may sound obscure, but it’s a hot topic for Texans who have tapped it in hopes of protecting fragile rivers or keeping air clean – and for the companies that spend time and money defending their permits.
For Texans in unincorporated areas that lack zoning, the hearings are likely their only chance to chime in on industry’s plans.
The hearings resemble a trial in which companies and their critics present evidence and testimony in front of an administrative law judge in hopes of swaying regulators, who have the final say. For particularly complicated – and controversial – industrial projects, the process can yield information that the short-staffed TCEQ did not foresee.
Protesters rarely convince regulators or a company to completely withdraw a permit application, but veterans of the process say they often win concessions that shrink a plant or landfill’s effects on the community.
In 2006, for example, Port Arthur residents reached a settlement with Motiva Enterprises, which was seeking to more than double the size of its refinery, now the largest in the U.S. As part of the agreement, the company added flame and sulfur recovery units that curb dangerous emissions.
Fraser’s bill would only apply to TCEQ’s permits. It would give the agency sole discretion over who is an “affected person” who could ask for a hearing; set an 180-day time limit for the proceedings (with potential exceptions); narrow the issues the public could argue; and arguably shift the burden of proof from the company to the public.
Currently, companies at a hearing must bring in experts to prove that a draft permit is acceptable. Under the legislation, a challenged draft would be presumed to meet “all state and federal legal and technical requirements,” forcing the citizen to prove otherwise. Opponents argue the change would limit the facts put before judges.
“There is no tick in the box for the people, of what the people want for their own communities,” Byron Friedrich, who is protesting a Caldwell County landfill permit, told lawmakers. “By limiting this, you also limit the people’s right to have their voices heard.”
But industry groups say they need more certainty. They complain that the hearings last too long and can be abused by groups trying to advance policy or business goals by slowing down the permitting process.
Texas is one of just a few states that have such a process. In most states, regulators merely invite citizens to submit comments ahead of a vote.
“Every major investment project is at risk of being contested, and this uncertainty in the regulatory environment is having an impact,” Hector Rivero, president and CEO of the Texas Chemical Council, testified at a recent committee hearing.
Richard Mason, with the chemical manufacturer Shintech Incorporated, which has long operated in Freeport, recently told lawmakers that the hearings process factored into the company’s decision to build a $1.3 billion ethylene cracker in Louisiana – not Texas.
Fraser, who last session pitched a failed bill that would have completely done away with the hearings, said that example hit home.
“As a job creator, I don’t want us losing jobs to Louisiana because of a permitting problem,” Fraser said in an interview. “Let’s get some certainty.”
But critics of the legislation say businesses are overstating the need for reform, and point out that less than 1 percent of permit applications ever draw a contested-case hearing.
Of 1,960 waste, water and air permit applications filed with TCEQ last year, for instance, the commission granted hearings to just 10, according to an analysis of public records by the advocacy group Public Citizen. The agency confirmed those numbers to The Texas Tribune.
The analysis also found that Texas typically processes air quality permits faster than Arkansas, Arizona, Oklahoma, New Jersey, Colorado and even Louisiana.
Carol Birch, a former administrative law judge who now volunteers with Public Citizen, said that sometimes companies – not bureaucrats – are to blame for a long-lasting permitting process, because they don’t spend time getting analysis correct in the first place.
“That’s something the applicant has the power to fix themselves,” she said. “The permit is substantially better at the end of the contested case process.”